Argentina's first local bond issue since July default fully subscribed

BUENOS AIRES, Sept 25 (Reuters) - Argentina on Thursday sold
two-year bonds worth 10 billion pesos ($1.19 billion), the
economy ministry said, in a strongly bid auction that was its
first in the domestic market since the South American country
defaulted on its debt in July.

The government will pay a yield of the benchmark Badlar rate
- the interest rate that private banks pay on wholesale
deposits of more than 1 million peso - plus 200 basis points.

The Badlar rate in pesos as of Tuesday was 20.125 percent,
according to the central bank.

The ministry said it received bids worth a total 10.61
billion pesos after offering notes worth 10 billion.

Argentina has been locked out of international capital
markets since it defaulted on a record $100 billion of debt in
2002.

It then issued bond swaps in 2005 and 2010 and had been
servicing the debt until it failed to complete a payment in July
because of a legal battle with U.S. investors who spurned the
restructuring.

The government has relied heavily on the central bank to
finance its spending and pay for energy imports.
(Reporting by Richard Lough and Nicolas Misculin; editing by
Andrew Hay)